All posts tagged multiple sclerosis

Elan has heeded the maritime adage of not changing pilot while approaching harbor, asking its long-serving chief executive Kelly Martin to stay at the helm until key data on Alzheimer drug bapineuzumab arrives in mid-2012, results that could either transform the Irish biotech’s fortunes or dash hopes of a huge windfall.

Kelly Martin, who has guided Elan since January 2003, was to have stepped down in May but has agreed to stay until the publication of Phase 3 data on bapineuzumab, an experimental treatment being developed by Pfizer Inc. and Johnson & Johnson.

If the trials are a success, the therapy is expected to become a blockbuster with revenues of at least $1 billion, of which Elan will get a 25% share.

“25% of the profitability of this research platform for Alzheimer’s, should any success occur, would be financially very, very powerful,” Mr. Martin said.

Is this a new dawn for Elan? Has the Irish pharmaceutical company finally turned that corner? It has claimed to have done so several times in the past and then–bam!–another unforeseen event came out of nowhere.

Elan reported a much narrower first-quarter net loss year-on-year earlier Wednesday and forecast an underlying operating profit for the full current year–the first time it has made such a prediction in several years. [Read our coverage here.]

Shareholders have seen Elan through accounting difficulties that slammed the share price, rejoiced when multiple sclerosis drug Tysabri was launched and gasped when it was withdrawn from the market in 2005.

Five years is a long time for Elan. It re-launched Tysabri in 2006, got a new CEO in the guise of straight-talking and capable Kelly Martin, and sealed an $885 million strategic investment by Johnson & Johnson last year.

In return, J&J received an 18.4% stake in Elan and also acquired rights to advanced research into drugs for Alzheimer’s disease, representing most of the value credited to the Elan Alzheimer’s pipeline at the time.[Read the press release here.]

Now the company wants to separate Elan BioNeurology–which owns its precious blockbuster drug Tysabri and its remaining Alzheimer’s pipeline program–from its drug-delivery business Elan Drug Technologies.

The future looks bright. But some analysts like Goodbody Stockbrokers’ Ian Hunter remain cautious. He has a “sell” rating on the stock. Others, like Davy Research’s Jack Gorman, maintain an “outperform” rating.

So … what could go wrong? Tysabri is the most effective MS drug on the market. There’s no doubt Tysabri has been a Heaven-sent for MS sufferers. But Elan is still highly dependent on it–and it does not come without risks.